Installation of equipment for gas processing facility at Badra field now complete

15 june 2015

The installation of initial equipment (steam generators) needed for the processing of associated petroleum gas (APG) has now been completed at the central oil-gathering facility at the Badra field (the operator of which is Gazprom Neft). Following the construction of a new production line, natural gas liquids (NGL) and dry-stripped gas will be separated from the APG and hydrogen sulphide used to commence production of granulated sulphur. The gas processing facility, which will have a total capacity of 1.6 billion cubic metres per year, is expected to be brought into production in 2017.

A proportion of the dry-stripped gas produced will be used to fuel power generators, allowing an uninterrupted energy supply to oil and gas processing facilities, drilling rigs and wells. A further proportion will be supplied to the Az Zubaydiyah power plant, located 100 kilometres south—east of Badra. The NGL will be used to produce liquid petroleum gas (LPG).

The next phase in the installation of gas-processing capacity at the central gathering facility will also see an increase in tank farm capacity, together with construction of an LPG storage facility (including infrastructure for loading tank trucks), a GX sulphur-forming unit, complete with warehousing for the storage of the finished product, and other processing facilities. Following completion of the project APG utilisation at the Badra field is expected to reach 99 percent.

The conditions pertaining to development of the Badra field mean that the consortium of companies developing the field will be compensated for all costs incurred in building the gas treatment facilities, and subsequently paid a premium for gas produced on terms analogous to those paid for oil.

Sergey Karavaev, Managing Director, Gazprom Neft Badra B.V. commented: “Work on construction of infrastructure at the field is ongoing and is being implemented consistent with our contractual obligations. Now, with the first major installation of process equipment, we can start work on the next phase of this project — the gas programme.”

NOTES FOR EDITORS

The Badra oilfield is located in the Wasit Province, Eastern Iraq. Preliminary estimates indicate total oil in place at the Badra field to be in the order of three billion barrels. The contract for development of the field is expected to run for 20 years, with potential for extension by a further five. Commercial production commenced in 2014, and is currently running at approximately 15–17,000 barrels per day.

Following repayment of investors’ costs, the terms of the contract with the Government of Iraq envisage compensation in the order of $5.50 per barrel of oil: this contract having been signed with the Government of Iraq in January 2010, on behalf of a consortium comprising Gazprom Neft (operator), KOGAS (Korea), PETRONAS (Malaysia), and TPAO (Turkey). Gazprom Neft’s interest in the project is 30 percent, with KOGAS, PETRONAS and TPAO holding 22.5 percent, 15 percent, and 7.5 percent, respectively. The Iraqi government’s holding is represented by the Iraqi Oil Exploration Company (OEC), which holds 25 percent.